Factors affecting cost overruns in construction projects: Project stakeholder perspective

Abstract

The construction industry is one of the major sectors in every nation that provides several services to individuals and other sectors. Researchers are studying the challenges facing this sector to develop integrated and scalable solutions to improve its efficiency, which can be reflected in the growth of the national economy. Accordingly, this study aims to analyze the important factors affecting cost overruns in construction projects among the main project stakeholders. The current study adopted a quantitative approach using a questionnaire survey to achieve this aim. The survey targeted the main construction project stakeholders. The data collected were analyzed using the Relative Important Index (RII), Rank Agreement Factor (RAF), and Percentage Rank Agreement Factor (PRAF) methods. The study results revealed that the most important category affecting project cost overruns is Financial-Related Factors. Additionally, the study findings revealed that owners and contractors agreed that an increase in fuel cost was the most critical factor. Meanwhile, the PRAF method showed that the critical factors affecting cost overrun are frequent design changes, fuel cost increase, high transportation cost, extra quantity during construction, and owner's financial difficulties. These findings can help construction industry professionals to assess and predict the critical factors affecting cost overruns of their projects. Predicting these factors helps develop necessary plans to reduce the impact of cost overruns in construction projects.